The Finance Ministry in its notification had communicated that the rates of interest on various small savings schemes for the Third quarter of the financial year 2018-19 starting October 1 and ending on December31, 2018. There is an increase of 30 to 40 basis in interest rates on various schemes compared to previous quarter.
The effective rates currently are as under.
|Scheme||Rate of Interest
October1, 2018 to
|Interest rate for the previous quarter||Interest compounded
|Savings account||4%||4%||Annual rest|
|1 year time deposit||6.90%||6.60%||Quarterly rest|
|2 year time deposit||7.00%||6.70%||Quarterly rest|
|3 year time deposit||7.20%||6.90%||Quarterly rest|
|5 year time deposit||7.80%||7.40%||Quarterly rest|
|5 year Recurring Deposit||7.30%||6.90%||Quarterly rest|
|5 year Senior Citizen Saving Scheme||8.70%||8.30%||Interest paid quarterly, Quarterly rest|
|5 year Monthly Income Account Scheme||7.70%||7.30%||Interest paid monthly,|
|5 year NSC||8.00 %||7.60%||Annual rest|
|PPF (Public Provident Fund)||8.00%||7.60%||Annual rest|
|KVP (Kissan Vikas Patra)||7.70 %(matures 112 months)||7.20% (matures 118 months)||Annual rest|
|Sukanya Samriddhi Account Scheme||8.50%||8.10%||Annual rest|
The government had announced in February 2016 that small savings rates will be set quarterly instead of earlier system of announcing for every year so as to align them with the market rate of government securities.
During announcement of interest for the quarter April -Jun 18, the Ministry withdrew the earlier restrictions for credit of interest in respect of small savings to basic Savings Bank account. Now all the interest and maturity proceeds of small savings instruments operated by the Department of Posts may be paid to the depositors through the depositor’s savings account standing at a post office or any commercial bank, by cheque or in cash.
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